With varying degrees of tenacity, the markets continued to rally on Wednesday, ignoring further potential red flags for the US-China relationship.
As Beijing add a bill banning mockery of the Chinese national anthem, while preparing to rubber stamp a new set of national security laws, armed policed flooded the streets of Hong Kong in an attempt deter and disperse pro-democracy protests.
Beyond the terrifying implications for Hong Kong itself, it is also adding fuel to the fire of US-China tensions. Trump has said he is ‘displeased’ with China, and that he will take action against the superpower this week if the national security laws are imposed.
And yet, despite all this, investors were insistent on focusing on the lockdown-easing measures from around the globe, extending yesterday’s substantial gains.
The FTSE added 1.2% as it crossed 6130 for the first time in almost a month, while the FTSE 250 climbed another 150 points, taking it past 17100. The Eurozone wasn’t quite as bubbly, though the DAX and CAC still rose 0.5% and 0.6% respectively.
As for the Dow Jones, the 1% increase currently suggested by the futures would take the US index to 25250, a level last seen in early March. Whether it not it makes good on that forecasts, however, may be dependent on whether Trump sticks to his word regarding taking action against China.
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